Competition Law Considerations for the Franchise Industry in Canada

Author: Mark C. Katz

The Canadian franchise industry constitutes an important sector of the Canadian economy. The industry employs one in every 35 Canadian, generates approximately C$68 billion in revenues, and covers a wide variety of businesses (60% of franchisees are in non-food sectors and industries.)

Franchising in Canada is governed principally by provincial legislation, with six provinces having enacted specific statutes in this regard. However, in addition to provincial regulation, franchisors and franchisees operating in Canada must also comply with the federal Competition Act (the Act), which applies generally to all businesses and industries in Canada.

Given the potential sanctions involved, compliance with the requirements of Canadian competition law – as embodied in the Act – is a critical business imperative. This article provides a primer on the aspects of Canadian competition law that are most relevant to the franchise industry in Canada, with a view to providing the foundation for such compliance.

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